The health of the US economy is causing much debate at the moment. The Chairman of the Federal Reserve Bank Ben Bernanke has declared that he finds the nature of the recent growth in the US to be of sufficient concern so as to not preclude further economic stimulus. Financial spread betting participants will now be adjusting their positions accordingly.
‘Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies,’ said Bernanke.
Over the past three months we’ve seen a steady improvement in the US’s ability to create more jobs than it loses and that has led many analysts to assume that the economic outlook for the world’s largest economy was improving and least providing IG answers.
The latest non-farm employment report revealed that the US economy added a net total of 227,000 jobs in February meaning that the top-level unemployment rate held steady at 8.3%. What also impressed economists was that January’s figure was revised up to a 284,000 gain from 243,000 while December’s non-farm number was changed up from a 203,000 rise to a 223,000 gain.
These figures also coincided in an up-turn in the fortunes of a broad-range of fundamental indicators highlighted by the very latest estimate of its fourth quarter GDP which was revised up from 2.8% to 3%.
However, in the past couple of weeks attention has moved away from the Greek debt-crisis and has shifted toward Spain, where the situation is serious but less acute; and so the economic performance of the US has taken centre stage again. Sadly, not all the figures have been flattering.
Investors will have noted that industrial production in February stayed flat.
And the news from the all-important housing markets in the US has been underwhelming. Existing home sales figures dropped by 0.9% in February to 4.59 million from 4.63 million in January. Housing starts fell by 1.1% in the same month from 706,000 in January to 698,000 in February.
Investors will have noted that industrial production in February stayed flat and that consumer confidence in Marc has dropped from 71.6 to 70.2.
These figures are perhaps symptomatic of the changeable but generally flat growth being experienced all over the world as the struggle to get over the worst financial crisis in history continues.